What is the test for an enforceable collateral contract?

The concept of collateral contract was adopted in Canada in Byers v. McMillan (1887), 1887 CanLII 58 (SCC), 15 S.C.R. 194. In that case the parties entered into a written agreement where the defendant agreed to cut and haul wood for the plaintiff. When the plaintiff failed to pay the defendant for his work, the defendant took possession of the wood in satisfaction of the debt. The plaintiff brought an action for replevin. The court admitted the defendant's evidence that the plaintiff had orally agreed that the defendant would hold the wood as security for payment. This oral representation constituted an enforceable, collateral contract between the parties.